Banks Are Evil

It's time to get painfully honest about this

I don't talk to my classmates from business school anymore, many of whom went
to work in the financial industry.

Why?

Because, through the lens we use here at PeakProsperity.com to look at the
world, I've increasingly come to see the financial industry -- with the big
banks at its core -- as the root cause of injustice in today's society. I can
no longer separate any personal affections I might have for my fellow alumni
from the evil that their companies perpetrate.

And I'm choosing that word deliberately: Evil.

In my opinion, it's long past time we be brutally honest about the banks.
Their influence and reach has metastasized to the point where we now live under
a captive system. From our retirement accounts, to our homes, to the laws we
live under -- the banks control it all. And they run the system for their benefit,
not ours.

While the banks spent much of the past century consolidating their power,
the repeal
of the Glass-Steagall Act in 1999 emboldened them to accelerate their efforts.
Since then, the key trends in the financial industry have been to dismantle
regulation and defang those responsible for enforcing it, to manipulate market
prices (an ambition tremendously helped by the rise of high-frequency trading
algorithms), and to push downside risk onto "muppets" and taxpayers.

Oh, and of course, this hasn't hurt either: having the ability to print up
trillions in thin-air money and then get first-at-the-trough access to it.
Don't forget, the Federal Reserve is
made up of and run by -- drum roll, please -- the banks.

How much 'thin air' money are we talking about? The Fed and the rest of the
world's central banking cartel has printed over
$12 Trillion since the Great Recession. Between the ECB and the DOJ, nearly
$200 Billion of additional liquidity has been -- and continues to be -- injected
into world markets each month(!) since the beginning of 2016:

With their first-in-line access to this money tsunami, as well as their stranglehold
on the financial system that it all runs through, the banks are like a parasite
feasting from a gusher on the mother-lode artery.

And the bonanza continues unabated today. By being able to borrow capital
for essentially free today from the Fed, the banks simply lever that money
up and buy Treasurys. Voila! Risk-free profits. That giveaway has been
going on for years.

Couple that with the banks' ability to push market prices around using their
wide arsenal of unfair tactics -- frontrunning, HFT spoofing and quote stuffing,
stop-running, insider knowledge, collusion, etc -- the list is long. James
Howard Kunstler is dead on: we don't have a free market anymore. Instead, we
have rackets, run by racketeers. The rest of us are simply suckers to be
fleeced.

Nobel Prize-winning economist Angus Deaton recently agreed:

Income inequality is not killing capitalism in the United States,
but rent-seekers like the banking and the health-care sectors just might, said
Nobel-winning economist Angus Deaton on Monday.

If an entrepreneur invents something on the order of another Facebook,
Deaton said he has no problem with that person becoming wealthy.

"What is not OK is for rent-seekers to get rich," Deaton said
in a luncheon speech to the National Association for Business Economics.

Rent seekers lobby and persuade governments to give them special favors.

Bankers during the financial crisis, and much of the health-care system,
are two prime examples, Deaton said.

Rent-seeking not only does not generate new product, it actually slows
down economic growth, Deaton said.

"All that talent is devoted to stealing things, instead of making
things," he said.

As further proof, let's look at this data recently obtained by Zero
Hedge. In the past 4 years, JP Morgan's in-house trading group has had
exactly 2 days of losses:

That's not trading. Trading involves uncertainty and risk. This situation
has none. It's an extraction process -- siphoning value from the market day
after day with ironclad dependability.

And it's not just a few dollars here and there. In 2016, JP Morgan's daily
average trading revenues were $80 million. Per day! That's nearly $20
billion for the year.

So if not "trading", what should we call it when a bank can extract tens of
billions of dollars a year from the markets, with no downside risk? "Sanctioned
theft" sounds about right.

Because for every trade there is a buyer and a seller. If JP Morgan is the
winner every day, who is losing? Turns out, it's the big pools of "dumb money" that
don't have the cheat codes for the system the way the banks do. These are the
pension funds, the index funds, the retirement accounts -- the aggregated money
of all the 'little people' out there. Little people who don't have visibility
into how they're being constantly fleeced; nor do they have agency to do anything
about it even if they did.

So yeah, "theft" feels like a pretty accurate term.

And it has reached the point where the banks don't even care about hiding
it anymore. If you had a nice inside racket going on, wouldn't you at least
pretend to hide your advantage, to avoid drawing attention? Not the banks.
They're either too proud or too obtuse to conceal it. Look at our string
of perfect trading days! Look at our record bonuses!

These boasts fall on the ears of everyday Americans as the modern version
of Let them eat cake!

And just like the out-of-touch French monarchs, the banks have positioned
themselves as the enemy of the public. For as I claimed at the beginning of
this article, a tremendous amount of the injustice in this country can be laid
at the feet of the banks directly, or indirectly via the Federal Reserve.

Are you a senior who can't afford to retire because you can't live off
your fixed-income savings? Thank the Fed's 0% interest rates for that.

Are you a millennial who can't afford to buy a home? Again, thank the
Fed's policy of suppressing interest rates and thereby blowing another housing
bubble.

Are you struggling to get out of poverty? Are you finding it hard to remain
in the middle class? Whatever your income, are you having to work harder
and harder to just stay in the same place?See
here how the Fed's money printing, and the banks' first-position access
to it, has created the most concentrated imbalance of wealth in our country's
history:

Are you frustrated with how our lawmakers seem to serve corporations instead
of the people? Listen to this mind-blowing podcast of how gobs
of lobbyist money, much of it provided by Wall Street, dictates how our
politicians legislate:

Whether it's social equity, the security of your job or retirement, your day-to-day
existence, or the fairness of the laws we live under -- our fate is currently
in the hands of the banks. And, of course, should their behavior trigger another
meltdown of the global economy -- something we warn about often here at PeakProsperity.com
-- we'll have them to thank for that, too.

Yes, the banks are going to keep writing the rules in their favor; and yes,
there's little agency any of us has individually to do much about it. But as
a society, we need to start addressing the dire situation we're in honestly
and openly. By whatever path, we have granted the banks far too much control
over our lives, and they are taking gross advantage of that. Exactly like a
parasite, the banking system is siphoning off our wealth and limiting our freedoms
and future prospects -- all for the benefit of an elite few.

That's wrong. It's immoral. And it's Evil.

It's far beyond time to call a spade and spade. The path to change always
begins with an accurate assessment of the problem. We need to start using accurate
language -- like "evil" -- when discussing the harm we're being subjected
to. We need to make it clear to our elected officials and to our communities
that we understand what the banks are doing and that we find it unacceptable.

We need to make the criticism specific and personal. To JP Morgan CEO Jamie
Dimon. To Fed Chair Janet Yellen. We need to turn up the heat on the perpetrating decision-makers,
so that the borg-like structure of the banking system no longer serves as a
deflective shield to scrutiny and criticism. These people need to feel the
disapproving stares when speaking to the public. They need to hear the disdainful
boos, and see their faces on the protest signs and nightly media reports.

And if you yourself work in the financial system, I'll be blunt. You're part
of the problem. Just like my former classmates, I'm sure you're a very nice
person in many ways -- but you're complicit in the banks' rapaciousness.

I know it's not pleasant to hear, or admit. I worked for an investment bank
for a few years early on in my career. I was part of the problem, too.

But we have a choice, both as individuals and as a society, to align our actions
with our values. It's not always easy. And likely not as profitable if you
indeed end up leaving the financial industry (as I can tell you from personal
experience). But it's the only way we'll ultimately gain back control of our
destiny.

Look, the banks' dominion is going to end one day. Either due to collapsing
under the weight of the stupendous
amount of debt they've helped laden our economy with, or due to an uprising
from the bottom 99% once it has become fully destitute. Neither path is appealing.

So our best choice here as individuals is to position ourselves where we can
be least subjected to the game the banks want to force us to play.

Finally, as a society, we need to wake up and make some hard, courageous choices.
Obviously, the banks will not relinquish their control willingly. But if we
start speaking truthfully and openly about the evil we're dealing with, we'll
start fearing it less. It's time for us all to speak up.

Adam is the President and Co-Founder of Peak Prosperity. Basically, his job
is to handle the business side of things so that Chris is free to think & write.

Adam is an experienced Silicon Valley internet executive and Stanford MBA.
Prior to partnering with Chris (Adam was General Manager of the earlier site,
ChrisMartenson.com), Adam was a Vice President at Yahoo!, a company he served
for nine years. Before that he did the 'startup thing' (mySimon.com, sold
to CNET in 2001). As a fresh-faced college graduate, he got a first-hand look
at all that was broken with Wall Street as an investment banking analyst.
Most important, he's a devoted husband and dad.